Finance Yorkshire has realised its investment in Rotherham-based S3 ID after Singapore listed CSE Global acquired 75 per cent of the business, valuing the company at £10million.
The sale represents the first exit for Finance Yorkshire which has made an aggregate return of £3.4million from an original investment of £1.6million, generating a money multiple of 2.2 on the transaction.
S3 ID was the first investment completed by Finance Yorkshire’s Equity Linked Fund in January 2011, seeing them take a 25 percent stake in the UK’s market-leading provider of innovative location awareness solutions.
S3 ID offers a range of unique and patented solutions which improve personnel safety and security in the oil, gas, petrochemical and energy sectors.
Since the initial investment, S3 ID has enjoyed a period of quick growth, reporting profits of just over £1million for the year ended December 2012.
Ian Brown, portfolio director at Finance Yorkshire, said:
“S3 ID is a fast growing company which has genuine prospects for further growth. We are pleased that Finance Yorkshire has been able to assist the business over the last three years and there is a realistic prospect this Yorkshire business can continue to grow and become a major player in the oil and gas sector.
“The business was in need of additional working capital to fund the size of projects it is now involved with and to support future growth on a world-wide scale.
“CSE Global has the sector expertise and the sufficient financial backing to provide the funding needed to achieve that ambition.”
Eversheds in Nottingham, led by M&A partner Antony Walsh, advised on the sale of the company. Hill Dickinson in Sheffield, led by partner Paul King, advised CSE.
Alex McWhirter, chief executive of Finance Yorkshire, said:
“We are delighted that S3 ID is the first Equity Linked Fund’s realisation. The company has grown significantly since our investment in 2011, to a point where it needed a significant injection of funding to take it on to the next level.
“The deal represents a good return on our investment and showcases how the Finance Yorkshire Equity Linked Fund can provide the financial support which allows a good local company to become a global success.”
S3 ID, which also has regional offices in Norway and Singapore, has developed a unique product range from its experience of serving the on-shore and off-shore oil, gas and energy industries.
“The Finance Yorkshire team worked hard with us in the early days and their advice and investment was a key factor in our success. We have created nearly 30 permanent jobs in the South Yorkshire region as a direct result.”
Finance Yorkshire provides seedcorn, loan and equity linked investments, ranging from £15,000 to £2m to help a range of small and medium sized businesses to meet their funding requirements for growth and development.
The project is supported financially by the European Union. It has attracted £30million investment from the European Regional Development Fund (ERDF) as part of Europe’s support for the region’s economic development through the Yorkshire and Humber ERDF Programme, £15million from Yorkshire Forward’s Single Programme, and £45million match funding from the European Investment Bank.